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Gold is dropping. (1 Viewer)

E

Eminence

Footballguy
Gold is:

Down $86.70 today.

Down $87.40 the past month.
Down $257.00 the past six-months.

Down $178.50 the past year.

Up $575.70 over the past five-years.

-

Take a look at this graph tracking the price of gold over the past 20-years:

http://www.galmarley.com/ChartApp/Images/USD_Line_20years_300x150.gif

As you can see, Gold has increased in value tremendously over the past three-years and as evidence in the chart it certainly has room to regress.

-

Typically, the value of Gold has an inverse relationship with the value of the US Dollar. If the US Dollar drops in value, Gold increases in value.

The basic concept being that when the US Dollar decreases in worth, it purchases less gold.

-

Many countries who have Oil in the Middle East have become aware of the inflation of the US Dollar. Because of this and a few other political reasons, the Middle East has decided it would rather conduct business in Gold rather than US Dollars.

China, having large stockpiles of Gold have no qualms with this agreement.

-

Pretty much, the price of Gold currently sits at $1,483.86 per OZ. The price has decreased over $100 in the past two-days. Gold has not been this cheap since April 25th, 2011.

What we might see is many people selling their gold, a $100 decrease in the past few days will certainly cause a few to panic (it's human nature).

I would recommend everyone monitor the price of Gold over the next couple months or so because if it continues to plummet, it could present a great buy-low opportunity.

 
Back in the early 2000s, an ounce of gold was worth about the same as an ounce of good weed - around $300-$400.

Luckily, good weed hasnt gone up like gold and is still $300-$400/oz today.

 
Last edited by a moderator:
How do I buy gold?

I've got a piece of a big mining company, so I'm playing gold that way. But what if I want to buy some and put it in my safety deposit box?

 
Eminence said:
Many countries who have Oil in the Middle East have become aware of the inflation of the US Dollar. Because of this and a few other political reasons, the Middle East has decided it would rather conduct business in Gold rather than US Dollars.

China, having large stockpiles of Gold have no qualms with this agreement.
Click to expand...
You're in a whole 'nother topic right here. The Middle East has all sorts of reasons to want off the dollar, Russia and China along with Iran have been heavily involved with that push for years. Oil historically has been a whole lot more important to holding the value of the dollar than gold. There were threads devoted to this on-and-off as far back as old yeller.

 
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low. I estimate there are probably 10 to 20 claims on every ounce of gold and silver in the world, if not more. And that will increase over the next 10 to 20 years.

If however you are buying it as insurance from the SHTF, then buy as much as you can and take physical possession it. Do not buy a contract on it, or an ETF that claims it has the precious metals on hand. Do not buy it and put I in a bank or a safety deposit box. If you can't hold it in your hand, then you don't really own it. With the banks manipulating the prices with all their naked short futures contracts, buying gold and silver as insurance is cheap... And if they manipulate e price down even more, then happily buy more. You wouldn't be upset if you home or auto insurance rates went down would you? If you are disappointed that price went down instead of up, then you aren't buying it as insurance.You've invested in it.

 
Politician Spock said:
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low.
Click to expand...
This is a genuine question, not intended as an argument at all - given the stmt above, how does that jive with this graph of gold prices over the last 20 years?

http://www.galmarley.com/ChartApp/Images/USD_Line_20years_300x150.gif

 
I got 100 GLD due to a sold put contract being executed a couple months back. Obviously I'm very upside down in it. While I think long term I like gold I don't see any rush to buy it today. I'll hold what I have but wait before buying anymore. I've learned once these trends start there is no need to fight them.

 
Mark Davis said:
I got 100 GLD due to a sold put contract being executed a couple months back. Obviously I'm very upside down in it. While I think long term I like gold I don't see any rush to buy it today. I'll hold what I have but wait before buying anymore. I've learned once these trends start there is no need to fight them.
Click to expand...
:goodposting:

I guess there is gong to be a lot of money made on the gold rebound in the years to come... but that doesn't mean today is the day to get invested.

 
Ben Hur said:
Politician Spock said:
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low. I estimate there are probably 10 to 20 claims on every ounce of gold and silver in the world, if not more. And that will increase over the next 10 to 20 years.If however you are buying it as insurance from the SHTF, then buy as much as you can and take physical possession it. Do not buy a contract on it, or an ETF that claims it has the precious metals on hand. Do not buy it and put I in a bank or a safety deposit box. If you can't hold it in your hand, then you don't really own it. With the banks manipulating the prices with all their naked short futures contracts, buying gold and silver as insurance is cheap... And if they manipulate e price down even more, then happily buy more. You wouldn't be upset if you home or auto insurance rates went down would you? If you are disappointed that price went down instead of up, then you aren't buying it as insurance.You've invested in it.
Click to expand...
umm, what?
Click to expand...
ETF's don't go out and buy Gold on a dollar for dollar basis with the money the raise when they sell new shares in the fund. i don't know the exact ratio because I don't invest in them, but a fair share of the ETF's assets are based on derivative contracts they hold in place of physical Metal.

So the theory goes if TSHTF and the investors in GLD (as an example) call for the fund to be liquidated and returned to investors there wouldn't be enough gold to go around.

For those who are interested in a Gold/Silver equity that has physical backing I'd recommend CEF. Now I have never been to the vault to verify the holdings or anything, but it seems a lot more legit then the traditional ETF's.

 
Almost pulled trigger to buy some silver last week.

My hesitation has finally paid off for once!

Think I may wait it out a bit more and see how far we dive

 
The Downward Spiral of the FFA, Chapter 16:

In which the acronym "SHTF" is casually dropped in financial threads, like we're at Zero Hedge or something.

 
The Ref said:
Ben Hur said:
Politician Spock said:
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low. I estimate there are probably 10 to 20 claims on every ounce of gold and silver in the world, if not more. And that will increase over the next 10 to 20 years.If however you are buying it as insurance from the SHTF, then buy as much as you can and take physical possession it. Do not buy a contract on it, or an ETF that claims it has the precious metals on hand. Do not buy it and put I in a bank or a safety deposit box. If you can't hold it in your hand, then you don't really own it. With the banks manipulating the prices with all their naked short futures contracts, buying gold and silver as insurance is cheap... And if they manipulate e price down even more, then happily buy more. You wouldn't be upset if you home or auto insurance rates went down would you? If you are disappointed that price went down instead of up, then you aren't buying it as insurance.You've invested in it.
Click to expand...
umm, what?
Click to expand...
ETF's don't go out and buy Gold on a dollar for dollar basis with the money the raise when they sell new shares in the fund. i don't know the exact ratio because I don't invest in them, but a fair share of the ETF's assets are based on derivative contracts they hold in place of physical Metal.

So the theory goes if TSHTF and the investors in GLD (as an example) call for the fund to be liquidated and returned to investors there wouldn't be enough gold to go around.

For those who are interested in a Gold/Silver equity that has physical backing I'd recommend CEF. Now I have never been to the vault to verify the holdings or anything, but it seems a lot more legit then the traditional ETF's.
Click to expand...
There is a lot of leverage in the commodity game.

I don't often agree with Spock, but he is right that physical possession is the way to go. The real value of gold or silver as a hedge against many types of tail risk scenarios requires it. Even bank safety deposits can be problematic.

 
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.

 
Das Boot said:
Politician Spock said:
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low.
Click to expand...
This is a genuine question, not intended as an argument at all - given the stmt above, how does that jive with this graph of gold prices over the last 20 years?

http://www.galmarley.com/ChartApp/Images/USD_Line_20years_300x150.gif
Click to expand...
Gold isn't anywhere near it's natural market price in dollars. It never has been.

For the first 180 years of the US dollar, the relationship between gold and the dollar was always fixed. The fixed price changed a couple times, but it was never just left to the market to decide what the real fair value was.

It began to float freely to the dollar when Nixon :"temporarily" closed the gold window in 1971, but it was not until 1975 that Americans could legally own gold again. That produced a bubble for gold over the next 6 years. Given the bubble was harming faith in the US dollar, and the dollar is the worlds reserve currency, central banks began flooding the market with gold sales, It wasn't until a few years ago that central banks went from being net sellers of gold back to being net buyers of gold. But given the central banks began buying gold at the same time everyone was buying gold, they've been physicially buying gold on the front end while on the back end naked short selling futures contracts for gold... and especially silver. And again, no national government will regulate or stop them from doing this because this is about protecting the faith in the national currency.

Other than the few years following 1975, we really haven't seen what the true market price of gold and silver really are.

 
Politician Spock said:
Das Boot said:
Politician Spock said:
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low.
Click to expand...
This is a genuine question, not intended as an argument at all - given the stmt above, how does that jive with this graph of gold prices over the last 20 years?

http://www.galmarley.com/ChartApp/Images/USD_Line_20years_300x150.gif
Click to expand...
Gold isn't anywhere near it's natural market price in dollars. It never has been.

For the first 180 years of the US dollar, the relationship between gold and the dollar was always fixed. The fixed price changed a couple times, but it was never just left to the market to decide what the real fair value was.

It began to float freely to the dollar when Nixon :"temporarily" closed the gold window in 1971, but it was not until 1975 that Americans could legally own gold again. That produced a bubble for gold over the next 6 years. Given the bubble was harming faith in the US dollar, and the dollar is the worlds reserve currency, central banks began flooding the market with gold sales, It wasn't until a few years ago that central banks went from being net sellers of gold back to being net buyers of gold. But given the central banks began buying gold at the same time everyone was buying gold, they've been physicially buying gold on the front end while on the back end naked short selling futures contracts for gold... and especially silver. And again, no national government will regulate or stop them from doing this because this is about protecting the faith in the national currency.

Other than the few years following 1975, we really haven't seen what the true market price of gold and silver really are.
Click to expand...
So it sounds like you think the real fair value is lower than the price now? Or do you think it is higher? I have heard the price is dropping because Cyprus is dumping 10 tons of it. True??

 
Runningman said:
Politician Spock said:
Das Boot said:
Politician Spock said:
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low.
Click to expand...
This is a genuine question, not intended as an argument at all - given the stmt above, how does that jive with this graph of gold prices over the last 20 years?

http://www.galmarley.com/ChartApp/Images/USD_Line_20years_300x150.gif
Click to expand...
Gold isn't anywhere near it's natural market price in dollars. It never has been.

For the first 180 years of the US dollar, the relationship between gold and the dollar was always fixed. The fixed price changed a couple times, but it was never just left to the market to decide what the real fair value was.

It began to float freely to the dollar when Nixon :"temporarily" closed the gold window in 1971, but it was not until 1975 that Americans could legally own gold again. That produced a bubble for gold over the next 6 years. Given the bubble was harming faith in the US dollar, and the dollar is the worlds reserve currency, central banks began flooding the market with gold sales, It wasn't until a few years ago that central banks went from being net sellers of gold back to being net buyers of gold. But given the central banks began buying gold at the same time everyone was buying gold, they've been physicially buying gold on the front end while on the back end naked short selling futures contracts for gold... and especially silver. And again, no national government will regulate or stop them from doing this because this is about protecting the faith in the national currency.

Other than the few years following 1975, we really haven't seen what the true market price of gold and silver really are.
Click to expand...
So it sounds like you think the real fair value is lower than the price now? Or do you think it is higher? I have heard the price is dropping because Cyprus is dumping 10 tons of it. True??
Click to expand...
The price should be much higher. Naked shorting of any asset drives the price down.

There are a lot of theories as to what the hell happened last week, and I'm sure we'll here more about its massive drop today.

I don't have a theory other that to say this could very well be an indicator that a major war is about to break out.

 
The Ref said:
Mark Davis said:
I got 100 GLD due to a sold put contract being executed a couple months back. Obviously I'm very upside down in it. While I think long term I like gold I don't see any rush to buy it today. I'll hold what I have but wait before buying anymore. I've learned once these trends start there is no need to fight them.
Click to expand...
:goodposting:

I guess there is gong to be a lot of money made on the gold rebound in the years to come... but that doesn't mean today is the day to get invested.
Click to expand...
I was tempted Friday to get out and not fight the trend at all but just couldn't pull the trigger. I know better than to sit for the beating so I have nobody to blame but myself. Today's action was expected. Longer term I want to have more weighted in gold but for now I just see no need in stepping in front of the freight train. Once the indicators switch over I'll gladly add gold but certainly not now.

 
Mark Davis said:
The Ref said:
Mark Davis said:
I got 100 GLD due to a sold put contract being executed a couple months back. Obviously I'm very upside down in it. While I think long term I like gold I don't see any rush to buy it today. I'll hold what I have but wait before buying anymore. I've learned once these trends start there is no need to fight them.
Click to expand...
:goodposting:

I guess there is gong to be a lot of money made on the gold rebound in the years to come... but that doesn't mean today is the day to get invested.
Click to expand...
I was tempted Friday to get out and not fight the trend at all but just couldn't pull the trigger. I know better than to sit for the beating so I have nobody to blame but myself. Today's action was expected. Longer term I want to have more weighted in gold but for now I just see no need in stepping in front of the freight train. Once the indicators switch over I'll gladly add gold but certainly not now.
Click to expand...
Gold has dropped over 20% a few times on the way up. Lets hope the overall trend higher is still in tact.

 
Politician Spock said:
Runningman said:
Politician Spock said:
Das Boot said:
Politician Spock said:
If you are buying as an investment, don't waste your time on gold and silver. The banks can naked short ridiculous amounts of future contracts for gold and silver, and no government will ever regulate or keep them from doing such because it keeps, and even increases, the faith in national currencies by keeping precious metal prices low.
Click to expand...
This is a genuine question, not intended as an argument at all - given the stmt above, how does that jive with this graph of gold prices over the last 20 years?

http://www.galmarley.com/ChartApp/Images/USD_Line_20years_300x150.gif
Click to expand...
Gold isn't anywhere near it's natural market price in dollars. It never has been.

For the first 180 years of the US dollar, the relationship between gold and the dollar was always fixed. The fixed price changed a couple times, but it was never just left to the market to decide what the real fair value was.

It began to float freely to the dollar when Nixon :"temporarily" closed the gold window in 1971, but it was not until 1975 that Americans could legally own gold again. That produced a bubble for gold over the next 6 years. Given the bubble was harming faith in the US dollar, and the dollar is the worlds reserve currency, central banks began flooding the market with gold sales, It wasn't until a few years ago that central banks went from being net sellers of gold back to being net buyers of gold. But given the central banks began buying gold at the same time everyone was buying gold, they've been physicially buying gold on the front end while on the back end naked short selling futures contracts for gold... and especially silver. And again, no national government will regulate or stop them from doing this because this is about protecting the faith in the national currency.

Other than the few years following 1975, we really haven't seen what the true market price of gold and silver really are.
Click to expand...
So it sounds like you think the real fair value is lower than the price now? Or do you think it is higher? I have heard the price is dropping because Cyprus is dumping 10 tons of it. True??
Click to expand...
The price should be much higher. Naked shorting of any asset drives the price down.

There are a lot of theories as to what the hell happened last week, and I'm sure we'll here more about its massive drop today.

I don't have a theory other that to say this could very well be an indicator that a major war is about to break out.
Click to expand...
thanks

 
Cyprus might sell 400mm Euros worth which I think equates to around 10 tons. But that's nothing. Fear would be Portugal or Italy having to sell.

I think we might test $1,150 before it is over, which could take months.

 
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a natural/political disaster.

 
Last edited by a moderator:
Slapdash said:
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a national/political disaster.
Click to expand...
Let's be clear here. Nothing that I see potentially happening is anything that I WANT to happen. I'm perfectly fine with people disagreeing with me, but I do not stand for people claiming that I desire something that I don't. What I say is what I believe to be the truth, good or bad. If it's good, then I want it. If it's bad, then I don't want it. But I'm not going to deny what I believe to be true just because I don't want it. It is what it is.

 
Politician Spock said:
Slapdash said:
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a national/political disaster.
Click to expand...
Let's be clear here. Nothing that I see potentially happening is anything that I WANT to happen. I'm perfectly fine with people disagreeing with me, but I do not stand for people claiming that I desire something that I don't. What I say is what I believe to be the truth, good or bad. If it's good, then I want it. If it's bad, then I don't want it. But I'm not going to deny what I believe to be true just because I don't want it. It is what it is.
Click to expand...
OK.

But you should realize that markets are very much based on psychology and perception. Perception becomes reality. By evangelizing to the extent Zero Hedge or some posters do, it just makes those outcomes you believe in more likely.

 
Slapdash said:
Politician Spock said:
Slapdash said:
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a national/political disaster.
Click to expand...
Let's be clear here. Nothing that I see potentially happening is anything that I WANT to happen. I'm perfectly fine with people disagreeing with me, but I do not stand for people claiming that I desire something that I don't. What I say is what I believe to be the truth, good or bad. If it's good, then I want it. If it's bad, then I don't want it. But I'm not going to deny what I believe to be true just because I don't want it. It is what it is.
Click to expand...
OK.

But you should realize that markets are very much based on psychology and perception. Perception becomes reality. By evangelizing to the extent Zero Hedge or some posters do, it just makes those outcomes you believe in more likely.
Click to expand...
Can one of you 2 change your avatar.

I am so confused!

 
Slapdash said:
Politician Spock said:
Slapdash said:
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a national/political disaster.
Click to expand...
Let's be clear here. Nothing that I see potentially happening is anything that I WANT to happen. I'm perfectly fine with people disagreeing with me, but I do not stand for people claiming that I desire something that I don't. What I say is what I believe to be the truth, good or bad. If it's good, then I want it. If it's bad, then I don't want it. But I'm not going to deny what I believe to be true just because I don't want it. It is what it is.
Click to expand...
OK.

But you should realize that markets are very much based on psychology and perception. Perception becomes reality. By evangelizing to the extent Zero Hedge or some posters do, it just makes those outcomes you believe in more likely.
Click to expand...
Markets should be very much based on psychology and perception. Our markets are not. They are planned and manipulated. Which relies on ignorance in order to succeed. When the people wake up in their psychology and perception, everything will natually go to their natural market values, which isn't anywhere near what the powers planned or have them manipulated to be.

 
comfortably numb said:
Slapdash said:
Politician Spock said:
Slapdash said:
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a national/political disaster.
Click to expand...
Let's be clear here. Nothing that I see potentially happening is anything that I WANT to happen. I'm perfectly fine with people disagreeing with me, but I do not stand for people claiming that I desire something that I don't. What I say is what I believe to be the truth, good or bad. If it's good, then I want it. If it's bad, then I don't want it. But I'm not going to deny what I believe to be true just because I don't want it. It is what it is.
Click to expand...
OK. But you should realize that markets are very much based on psychology and perception. Perception becomes reality. By evangelizing to the extent Zero Hedge or some posters do, it just makes those outcomes you believe in more likely.
Click to expand...
Can one of you 2 change your avatar.I am so confused!
Click to expand...
I have to admit - I've confused them a few times in the past.
 
Slapdash said:
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a natural/political disaster.
Click to expand...
I agree with you in a disaster scenario that physical possession of gold could help.

However, if we are truly talking Mad Max type of event, there is no reason to believe precious metals will be the currency any more than chickens, seeds, US Dollars, gasoline, or computer motherboards.

 
Fennis said:
Slapdash said:
Fennis said:
Its nice to see spock and slapdash united in their agreement for how to prepare for Armageddon.
Click to expand...
Although I don't think it is particularly likely to happen how Spock wants it to. I am speaking to gold as safety in a natural/political disaster.
Click to expand...
I agree with you in a disaster scenario that physical possession of gold could help.

However, if we are truly talking Mad Max type of event, there is no reason to believe precious metals will be the currency any more than chickens, seeds, US Dollars, gasoline, or computer motherboards.
Click to expand...
If we are talking Mad Max type of event, I'd rather be dead.

My belief is just that history will repeat itself. History has never had a Mad Max type of event. But many times in history economic turmoil has led to civil unrest. In fact, we celebrate one of those instances in history every July 4th.

Precious metals probably won't be the next currency, but they transfer wealth from the prior form of currency to the new form of currency. A lot of paper assets don't do that.

 
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